Navigating Education without Student Debt

#Winning

Jordan Peterson is having “a moment”. A widely circulated interview brought his considerable platform into the spotlight with a variety of articles including this David Brooks piece which summarizes things nicely.

In the aforementioned interview, he uses a word I hadn’t fully considered: Competent.

“Competency is power”

I bounced that idea off my kids around the dinner table last night. I do want them to marry someone who is competent. Competent at cleaning the kitchen, competent at raising children, competent at balancing a checkbook, competent at managing conflict in a healthy way, competent at managing the many problems life brings.

When my wife and I started dating, my roommate and I were not competent at lots of things, not the least of which was cleaning. We once went an entire year without cleaning the kitchen. Don’t ask. The bathroom was worse, so it took most of the attention away from the kitchen. People would just leave rather then use the bathroom.

We aren’t born competent. We have to learn, and most learning comes from Someone who already knows how to do it.

It’s ok if we aren’t competent in our personal finances yet. It’s not ok for us to stay that way. We, our (future) spouse, our business partners, our children, and our parents deserve better. Have you ever had a friend (usually when you were younger) that always was asking to borrow money? It’s hard to be friends with that guy.

No judgement. I doesn’t matter when we find ourselves today. I’m much better at cleaning my kitchen these days. Let’s pick one area, talk to someone who knows that area, and start making small actions.

Creating a little extra margin in our financial lives will radically change our relationship with money. Saving or earning an extra $1,000 would make a big difference in all of our lives. We can do it in 2018.

A spark of Hope let’s us Believe it’s possible. A little Belief starts our brains looking for Opportunities. An Opportunity seized creates an Action. Action leads to the physical changing of our circumstances.

Changing our physical conditions is “work” in all its forms. The work of creating order from chaos. “All hard work brings a profit, but mere talk leads only to poverty.”

Here is an article link to get your brain working and create some hope. Hope in this case being the persistent belief that its possible to change our physical circumstances through “work”.

Our country loves the “Horatio Alger” story – the old rags to riches. In our culture, one of the most popular narratives to riches is through being a great investor.* If I can figure out the market, I’ll be able to see something others don’t and it will make me wealthy. Warren Buffett is the hero of this story. I poured through his biography (The Snowball, 832 pages!) when it came out looking for secrets and clues. One potentially controversial belief I’ve developed:

I don’t believe being a “great investor” is a reasonable path to wealth.

We need to let go of the myth that we are one hot stock tip away from financial success. This narrative is baked into our entire culture. TV networks like CNBC and Fox Business are built on this myth (Here is the 8 best TV shows ranked by a website dedicated to investors). Entire print industries (Money magazine, financial help books) have this narrative intertwined in their unspoken promise to the reader.

I’m convinced it doesn’t work and in fact it’s a massive waste of time and distraction from actually accumulating wealth. Why? Here are three of many reasons:

Not enough initial capital

A friend of mine recent came and asked for some advice on which stock to buy with a $1,000. I didn’t have the courage to tell them it didn’t matter. Warren Buffett, the wealthiest person in America and perhaps the best investor in our history has earned around 20% compounded return. Maybe you’re a better investor then Warren Buffett, but if you’re as good as him in 10 years your $1,000 will be worth $7,268.

The point is that most of us don’t have enough upfront capital to take advantage of outsized returns, even if we were to get them. Does this mean we shouldn’t save or make wise investments? Of course not. It should pop the bubble that I’m only one key investment away from financial freedom.

There is a huge separation between how it feels for my $1,000 to be up (or God forbid down) 8 points this morning and the actual impact that will have on my life. That’s why some of the best investors don’t follow the market or invest in individual stocks. That’s why it “doesn’t matter”. There are a dozen other more important financial decisions each month that will affect my financial future far more than the short term fluctuations a $1,000 investment.

Have to live on the returns

My dad went to a three-day seminar on how to use stock shorts and options to make a killing in the market. One major problem (beside the fact that nobody actually “beat’s the market”) is that if my dad did this from home he’d still have to pay for his regular living expense from his earnings. For example, if he earned 20% on a huge sum of money like $250k, he would clear about $50,000 in income before taxes. The problem is that he’d use most of that money up, you know, eating and stuff. It would make it almost impossible to actually accumulate wealth unless you had your living expenses covered by an actual income or you had some amount of money large enough ($2M+) that $50k wasn’t a significant deduction from returns.

Another example. People have asked me about real estate investing. I think it’s a wonderful investment, but unless you have a significant amount of capital don’t plan on making a living doing it for many years. It’s a great side job, but if you’re living on the returns it’s a poor way to accumulate wealth. In fact, almost everyone I know that has done well in real estate has done it by working (improving, changing use, managing, etc.) rather then passive investing.

Not really an expert

This one hurts a little. My pride tends to try to convince me that I know more then I really do. I’ve noticed that the professional investors from books like The Big Short and The Snowball spend a tremendous amount of time and attention learning their craft inside and out. I know several professional investors personally, and I’m continually taken aback by how much they put into understanding each investment. Even after exhaustive consideration, they build investment models around the inherent acknowledgement that theywill be wrongsome of the time.

If someone says you should invest in such-and-such because the kids are using it or something, I beg you to stay away. Virtually all public information is trash. One of the core tenants of all investing is “Invest in what you know”. Being honest about what I really know isn’t easy, but it will save me a lot of dashed expectations and refocus me back on activities that pay huge dividends.

Next week: If you aren’t going to waste time/effort/dashed expectations chasing the next great investing tip, what should you do instead?

I got to know Josh last year when we were stuck at the Pittsburgh airport together. He was kind enough to buy me lunch and I can confirm he pays with cash! He is a graduate of Denver Seminary currently working with Dave Ramsey’s organization teaching financial principles. He is uniquely understanding to the real life financial stress of being a graduate student.

What years were you at Denver Seminary, what was your focus, and what are you doing now?

My family and I were at Denver Seminary beginning in August of 2007 and graduated in May of 2012. Yes, we were able to cram a two-year degree into five years. As any economist can tell you- this was a booming time in our national economy 🙂 A little backstory, my wife (Christina) and I started with one child and, before moving off-campus in 2013 for a job back in the South, when I graduated we had four children under the age of six. So we went through seminary at a slower pace – at the speed of cash.

I initially was accepted into the counseling program, but at the last minute, I changed to a MA in Leadership and studied leadership with a self-designed emphasis on community development.

Now, I am part of a team of stewardship/church advisors at Ramsey Solutions or better known as Dave Ramsey’s office in Brentwood, TN. Together we serve pastors, church leaders, community developers, and seminarians as they are building and/or remodeling their financial discipleship ministries in their churches/communities.

Draw a connection between personal finances and your ministry training. Why are you doing what you do now?

Personal finances played a large part in “How?” we went through seminary. We went through seminary as we could afford (at the speed of cash) and did not take out any student loans, or any loans for that matter pre/post seminary for living expenses before, during or after seminary… nor did we have to take out any loans for relocation expenses post seminary. Which meant I took classes part-time (a lot of night classes) and worked full-time down in Colorado Springs. We lived on campus in Littleton so that we could literally have a built-in community for my family through our seminary years. During my seminary years I truly embraced a concept that Dr. Larry Lindquist noted at my new student orientation, “Learn from, embrace and take note of the time and experiences spent outside of the classand library as much as the time inside the class and library.” In other words, pay attention and be aware of the experiences and interactions that God orchestrates during your seminary years both inside and outside the structured learning environment.

A big part of “Why?” I am doing what I am doing now is because of our experience of going through seminary debt free without loans and how God surprised and transformed my family and I with His lavish provision which came in many forms- literal hard work, redemptive financial gifts from churches back home, anonymous envelopes of cash on our doorstep, care packages from friends and families, support from our neighbors and peers on and off campus, and lavish support from ministries in the Denver metro area (e.g. Manna ministries, bread drop and food closet at Denver Seminary, odd jobs for my mentors, and support/encouragement from Colorado Community Church, etc.). Through this transformational process known as the “seminary years” we were able to graduate seminary debt free and go when God said, “Go” via a job opening at Ramsey Solutions.

Now at Ramsey Solutions, I have the opportunity and privilege to minster and walk with men and women who are leaders in their community and looking for ways to equip families, marrieds and singles who are struggling or in need of a tune up financially. It still surprises me each day how finances are many times a gateway to how someone is really doing. Billy Graham was spot on when he said, “Give me five minutes with a person’s checkbook (or online bank account these days), and I will tell you where their heart is.”

In your personal story, what did you have to do to graduate without a big debt burden?

Decide that going into debt and taking out loans was not an option from the beginning. Again, it is important to note that my personal story turned into a family and community story. When my family and I graduated from seminary it was a team success. Yes, I had to do literally whatever it took to graduate debt free, which many times required me working and traveling a whopping 70-80+ hours for a five-year period… but God was so lavish in His provision of not only work but wages, health, a steady stream of prayers and encouragement from friends and families across the country.

What do you think are the biggest FINANCIAL challenges facing future ministers?

Pride, pride and… pride. Be open and ask for help. We all need help, so put your pride aside, humble yourself and let others know how they can help you- the sooner the better. The world does not need perfect leaders, but humble leaders who can ask, be filled and receive help from God and through His means. My mentor Pastor Brad Strait said it best, when personally I hit a VERY low point midway through seminary, “Joshua, allow others to minister to you. One day, I know this may not be encouraging right now…,” he laughed and continued, “… you will be on the other side of the equation and serving others. So do not forget the struggles, thoughts and challenges you are experiencing right now and use them to better serve others.”

If you could give one piece of advice to a student just starting seminary now, what would that be?

“Slow down and go outside.” A smile comes to my face as I reflect on my seminary years and the wisdom that was poured into me from one man in particular- the late Dr. Vernon Grounds. I can think of at least three different encounters in the Denver Seminary library in which he would stop by my desk and say, “Son, what’s the rush? Go outside… its beautiful out there. Don’t spend all your time cramped up in this library!”

Or said another way, don’t believe the myth that the pace of the seminary years will slow down once you graduate. I would argue that the pace only increases after you leave, and you need to be intentional NOW about building in times “outside” with friends, families and enemies for that matter… before, during and after your seminary years.

How is it even possible to go to graduate school without going into debt?

First of all, going to graduate school is a want not a need and is a choice. I literally made a deal with God before going to seminary. I told him, “God, if this is your idea, you are going to have to provide and show me how to make this work financially each semester.” Remember, with God all things are possible, and this may require one to rethink his or her current way of going through seminary and to evaluate their previous, present and future standard of living. We made a ton of small changes and pivots to live more intentionally and frugally. For example, prior to attending seminary and as a family of three, my wife, daughter and I lived in a 240 sq. ft. apartment. We also worked two jobs and saved up an entire full year before moving out West to begin seminary. Once in school, we took full advantage of bread drops for seminarians, became a one car family, very very rarely ate out, had family style meals with neighbors, refrained from getting a TV and our entertainment was enjoying the great outdoors. Chances are, if your story is like ours it will also require more than just the work of one’s two hands and will involve a community of support, gifts, pep talks from mentors, days of repentance and journaling, telling others “Sorry, I was wrong!”, forgiveness, letters of encouragement and prayers to get you through as well.

Remember, I wish someone would have told us this: It costs money to move to that new job after you graduate. So start saving for moving expenses if your next job requires you to move across the country.

What word of advice do you have for someone that isn’t good at budgets? How do I start doing a regular budget?

Join the club! Like the Apostle Paul, when it comes to doing a budget, “I am the chief of sinners!” Kind of joking, kind of not, but seriously- it takes practice. My wife Christina and I, when we were first married took 3 months to just get started doing a budget (this is what happens when your marriage consists of two oldest children who are recovering perfectionists). We attended financial seminars, read budgeting books, used online forms and sought out advice from those that we wanted to mimic financially as we grew up together; however, it was not until we went through a Financial Peace University class (that was hosted by our Senior Pastor at our home church in South Carolina) that we actually did and lived on a budget on a consistent regular monthly basis. Are we perfect now, “No!” Some months we do not start until the month is almost halfway over, but we now build grace into our budgeting lives, remind ourselves to push pause, start where you are and face the reality of where you are in the month and what remains.

Make doing a budget simple. I have heard it said that budgeting is like a marathon. As a runner, this is ridiculous – a marathon only lasts 26.2 miles and is one day. Budgeting is more like an Ultra Race that lasts your entire life! All kidding aside, find a basic budgeting spreadsheet or plan that works for you and your family and KEEP IT SIMPLE. With time you can add more depth, but first you will need to pace yourself for the many miles of budgeting yet to go. If you really want to make a budget stick and see lasting results, ask for help from a budgeting coach. This needs to be someone who has a track record of helping others, the heart of a teacher AND can help keep you accountable, no matter how much you whine or try to make up an air tight, theological excuse of, “Why?” your situation is different especially as a seminary student (pointing a finger at myself here). As Dave Ramsey is fond of saying about a young, novice baker who is frustrated that his vanilla cake keeps turning out chocolate, “If you are not happy with the results you are getting, change the recipe.”

You can touch base with Josh at joshuathecollier@gmail.com. If your church would like to host a Financial Peace University class, he would also be a good contact for you. Thanks for reading! Sorry for any abuses of the king’s English – this is a transcript of a recorded conversation.

Ten years ago exactly this month, Noelle and I opened the credit card statements from Christmas and realized we owed over $7,000 on those two charge cards. We also owned a condo that wasn’t rented, had a car loan on a sweet Mustang GT convertible, and one more student loan for old times sake.

That week I was playing basketball on a Monday night at Smoky Hill Vineyard church and saw a sign there for a class: Financial Peace University. We had missed week one, but the next night – week two of the class on a Tuesday in January, we were there.

It didn’t happen overnight, but we sold the condo, sold the mustang, lived on “beans and rice”, and paid off all of that within the year.

It isn’t a coincidence that these classes start this time of year. January is a time of new year resolutions and new beginnings. If you’re “sick and tired of being sick and tired”, now is a great time to push the reset button.

I have a friend who works in the construction trade. He confessed that sometimes he puts off or just forgets to make his truck payment for a month or two. He always catches up and pays it back current, it’s just hard to keep track of all of his bills and pay them on time. Now he was worried his low credit score wouldn’t let him expand or buy a house in the future.

I know this friend is really skilled at his job. I also know he is meticulous about cleaning his tools at the end of the day. Why I asked him? Because, he told me, “If you take care of your tools they will take care of you.”

These are the wise words of a skilled craftsman.

The following word picture occurred to me and we talked through it:

One of the many reasons we all work and is to secure our unknown financial future. Good credit is a symptom of someone that takes care of their personal business. I want you to think of your credit as a tool in the toolbox of your financial future. Take care of this tool with the same diligence you bring to your physical tools.

Sometimes it’s hard for us to think and work outside the area of our expertise. If we’re working long hours, in graduate school writing papers into the night, feeding and changing small children, or feeling the weight of ministry demands it can be difficult to remember the importance of the other ‘tools’ in our life.

Our physical body might be our most important tool. We can’t do anything without it. Let’s take care of that tool. Everyday.

Success in life is impossible without healthy relationships – to God and others. Is there some rust building there?

When Noelle and I were really motivated to get out of debt, we spent a few minutes each day thinking and taking a small action. We understood that meeting this financial goal would be a valuable tool that would enable us to be able to do ministry, provide a stable home for our children, and be generous givers.

David Brooks has highlighted a problem he calls a Vampire Problem. Say you are thinking about becoming a vampire, but you’re on the fence. The drinking blood, sleeping in a coffin, no playing golf during the day…it’s a tough decision. Adding to the problem, once you become a vampire there isn’t any going back. Brook’s point is that the most important decisions in life, who to marry, when and how many kids to have, what job to take, these types of problems are ‘vampire problems’ – they have two main characteristics:

1.) There isn’t any way to fully know what life will be like if you make that decision.

2.) Once you make the decision, you can’t go back.

These type of problems can’t be solved with logic, knowledge, analytics, research, or education. As the article points out: “’You shouldn’t fool yourself…You have no idea what you are getting into.’” These type of problems require faith.

Following Jesus is certainly this type of problem. He promises that (1.) You’re spiritually dead right now and you can’t know what it’s like to be alive but (2.) you can be alive with a life that’s better than you can ever imagine and once you are alive you won’t ever be the same.

A lot of financial problems are like this as well. There isn’t any way to fully know the outcome of a decision you need to make. Can I afford to have a child right now? If I take this 2nd job, will I have enough time and energy for my friends and family? If I commit to paying off debt will I still be able to have fun? Will this investment pan out? Which of these two jobs should I take? Is it worth it to move to a new city to go to grad school? Should I fix this old car or buy a new one?

The good news is that faith isn’t blind. It’s an action in the direction of my hope. That’s why all my financial (and life) choices need to start with an act of the will. I need to have hope in my heart that I can be debt free and that it will be worth it before I can start taking actions in that direction.

Faith is the action toward the thing I’m hopeful for. What are your financial hopes for 2017? How about 5 years and 10 years from now? Let’s write those down as we head into a new year. Do you hope to be debt free? To pay off your student loans? To have a fully funded emergency fund? To pay for graduate school? To land a specific job? To start a business?

Shortly after the 2002 elections, I remember being optimistic that we might see some real change on several conservative key issues. Republicans had just won several swing seats and took a majority in the Senate. They already owned a majority in the House and had a very conservative George W. Bush in the presidency for the next 6 years.

Near the end of 2007 I distinctly remember President Obama’s acceptance speech in Grant Park where he famously proclaimed his administration’s CHANGE with the affirmation “Yes we can”. It was a great speech. Democrats controlled the House and Senate for the next four years.

I remember telling my wife on that night 8 years ago that there were a lot people putting their hope in this man to make their lives better. It’s a hope that no human being can fulfill.

At the risk of sounding like a self-help guru, “If it’s to be it’s up to me.”

The night of November 8th there will be a lot of disappointed people and worse there will be a lot of happy people that think they accomplished something.

I’m reading “Getting Things Done” and came across this about making a change and getting something accomplished:

…anything personal or professional, big or little, of urgent or minor importance, that you think ought to be differentthan it currently is and that you have any level of internal commitment to changing.

There it is. The key to my success and happiness and meeting my goals (financial and otherwise) is summoning the burst of energy needed to make a decision about what needs to change (getting sick and tired) and making an Internal Commitment to Changing (mad as hell and not going to take it anymore).